The Center for Effective Government (formerly OMB Watch) ceased operations as of March 2016. The majority of work and materials has been passed on to the Project On Government Oversight (POGO). This site is being maintained as an archive of materials produced.
Back in August, I blogged about a report issued by the U.S. Senate Permanent Subcommittee on Investigations about how foreign banks, specifically large European banks, were helping wealthy Americans evade U.S. taxes.
Rethinking the crux of the financial markets crisis and its solutions, Treasury Secretary Henry Paulson announced today that the $700 billion Troubled Asset Relief Program (TARP), originally intended to take toxic financial assets off the books of lending institution
On the Depart of Treasury Emergency Economic Stabilization Act (EESA, AKA TARP) website, the Department has posted, according EESA law, a list of transactions made under TARP. And here they are, all $125 billion* worth of them:
The Congressional Budget Office reported in its Monthly Budget Review for October that the federal budget deficit for that month will be $134 billion. But CBO predicts that when the Treasury Department releases the official deficit number later this month, it will be $232 billion.
The $98 billion gap is the product of differing interpretations on how purchases under the Troubled Asset Relief Program (TARP) should be scored. According to CBO:
...the stock investment and associated warrants should not be recorded on a cash basis but on a net present value basis, accounting for market risk, as specified in the Emergency Economic Stabilization Act. CBO's preliminary estimate of $17 billion for the present value cost is included in its estimate of $134 billion for the October deficit.
So far, Treasury has purchased $115 billion in bank stocks. Treasury says that this will increase the budget deficit by $155 billion, while CBO says it should increase the deficit by $17 billion.
This is an interesting development, as the potential impact on the budget deficit could be hundreds of billions of dollars, depending on whether Treasury follows the law, and uses a present value calculation -- the method employed in CBO's estimate, or if it continues to use a cash basis of accounting. There are a number of ramifications that could result from these accounting differences.
A larger budget deficit figure may impose constraints on future fiscal policy
Cash-basis accounting of these assets deviates from current practice. For example, a student loan is not counted as a cash expenditure, but as an asset, as the government expects to see the principal repaid
The future sale of purchased bank stock would appear to decrease the budget deficit. This could open the door to manipulation by an administration seeking political gains to be had from decreasing the federal budget deficit.
The Bush administration is continuing its push to finalize hundreds of new regulations in an effort to cement its legacy before the new administration takes power on Jan. 20 next year. Also called "midnight regulations," these rules tend to get rammed through the regulatory review process before the lights go out on an administration, regardless of process violations or self-imposed cutoffs.
It's up from 6.1 percent in September to 6.5 percent in October. Also according to the Bureau of Labor Statistics, the economy lost 240,000 jobs in October, as the year-to-date number of jobs shed rose to 1.2 million.
The Government Accountability Office (GAO) has created a website "designed to help make the [presidential] transition an informed and smooth one across the federal government." In addition to suggesting myriad policies for various governmental issues like the long-term fiscal outlook,
A paper released last month by tax guru Joel Slemrod and Andrew Johns of the IRS analyzing "newly available data from the IRS's most recent comprehensive study of individual income tax noncompliance, the National Research Program, [assesses] the distributional consequences of income tax noncompliance in the U.S. federal income tax for the tax year 2001."
Writing in The New Yorker, Steve Coll meditates on the significance of the reactions certain political élites who are now lining up in favor using the government to better the economy.
The country is fortunate in one respect: the sudden buckling of financial safeguards has put just about everyone in touch with his inner New Dealer. Even Alan Greenspan recently confessed to Congress a crisis of faith in self-regulation. Meanwhile, former free-market true believers in the Bush Administration have tossed out money from the public vault like looters...
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The Bureau of Economic Analysis (BEA) has released GDP figures for the third quarter. This "advance" number indicates that the economy contracted in the past three months at annual rate of 0.3 percent.
The Congressional Budget Office reported in its 